Tax authorities propose not to tax labor migrants with annual income  of up to AMD 12 million 

ArmInfo.The Armenian authorities may not to tax the income of citizens traveling abroad  for seasonal work if their annual income does not exceed 12 million drams (about $29 thousand at the current exchange rate).

The legislative initiative of the State Revenue Committee of the Republic  of Armenia, with certain reservations, is presented on the single  portal of legal acts e-draft.am.  Previously thousands of citizens  who travel to Russia for temporary work, upon returning home,  received letters from the State Revenue Committee stating that they  have tax debts in the amount of 100 thousand to 1 million drams. In  Russia the income tax rate is 13%, and in Armenia it is 20%  currently. The difference is 7% and must be paid by labor migrants,  plus late fees (fines and penalties) of 0.04% for each unpaid day. It  is noteworthy that citizens were not informed about this decision in  advance.

The Committee recalled that in 2020 the Republic of Armenia acceded  to the Protocol "On electronic exchange of information between CIS  member states for tax administration purposes," under which the tax  authority for the first time received information on income received  by individuals in the CIS member states, on the basis of which  individuals were notified regarding the calculation and payment of  income tax in accordance with the legislation of the Republic of  Armenia (previously, the head of the State Revenue Committee, Rustam  Badasyan, told reporters that this regulation is not mandatory).

Now, in response to citizens' dissatisfaction, tax officials have  decided not to tax migrant workers, but with certain reservations.  Thus, the draft proposes to establish that income received by  individual residents of the Republic of Armenia from sources outside  the Republic of Armenia within the framework of civil contracts for  the performance of work and/or provision of services is not  considered subject to income tax, if during the reporting year the  specified income does not exceed 12 million drams and if labor  migrants have already paid income tax in the country of receipt of  income.

At the same time, this provision does not apply to those  resident-individuals who received the abovementioned income remotely  - for performing work or services on the territory of the Republic of  Armenia, as well as to those resident-individuals who received the  corresponding income from organizations registered in countries  (geographical zones)  with special liberal taxation systems  determined by the Government.

If approved, the legislative norm will apply to labor relations  formed (implemented) in 2020-2023.